Nokia bows 5530 XMbudget touch phone and Nokia’s phone launches this morning is its first lower-end touchscreen device. The 5530 XpressMusic is still a true smartphone with Symbian S60 and a 2.9-inch, 640×360 touchscreen . It limits cellular data to EDGE and relies on Wi-Fi as its fastest connection; A 3.2-megapixel camera stays onboard, as does a bundled 4GB microSDHC card (down from 8GB) for storage.

The success of the 5800 Xpressmusic has convinced Nokia to release a cheaper version, the 5530 Xpressmusic, which looks like a sexier version of the 5800 and available at a cheaper price.

As a newer phone, the 5530 XM has an advantage in a updated home screen compared to the 5800. It now has a “people carousel” that shows as many as 20 preferred contacts from the home screen by scrolling with a finger. The front end also has quick shortcuts to key apps and a pop-up media bar that gives access to and control of music, photos and video without delving into the related apps.

“The Nokia 5530 XpressMusic follows in the footsteps of the top-rated Nokia 5800 XpressMusic, expanding the touch XpressMusic phone range with a youthful device that has a solid stainless steel frame finish and comes in five vivid colors,” said Nokia. By shedding 3G, GPS and added storage, Nokia has brought the price of the touch phone down to 199 Euros ($278) before applying carrier subsidies.

The 5530 will have a smaller screen (2.9-inch vs 3.1-inch) and a smaller memory card (4GB vs 8GB) compared to its bigger brother; Gone is the 3G connectivity and GPS but apart from that, it is a Nokia 5800 in essence.

Running the S60 5th Edition on Symbian OS 9.4, the phone’s screen is a touch model and displays 640×360 pixels. It comes with an accelerometer, WiFi/EDGE, a 3.5mm audio socket, a FM radio and a 3.2-megapixel camera complete with Flash.

The 5530 is significantly smaller than the 5800 due partly to the fact that the former ditched physical buttons. There’s no TV out, no spare stylus or plectrum, no carrying case .

Nokia said in a statement that “This latest multimedia sensation puts masses of music power at your fingertips – and comes with a highly appealing, mass-market price-tag. This device is great for people who like to express themselves through their music, their style, and the friends they keep. It comes in a choice of five vivid color combinations, finished within a cool, stainless steel frame. The Nokia 5530 is powerful and fast too. You can stack it with up to 12,000 music tracks or tons of videos and photos. It also provides built-in Wireless LAN.”

It’s all about quick access. There’s the Media Bar drop-down that’s also on the Nokia 5800, for quick access to the music player, browser, and photos. But on the Nokia 5530 XpressMusic, you can also define 4 shortcuts for the home screen (say, for Facebook or MySpace quick links). Also, one of the big additions, we think, is the new Contact Bar that lets you have up to 20 contacts, making it easy to quickly call or send a message, review conversation history, or follow the contact’s feed. It’s like a quick dashboard on your 20 most important people. What’s more, add a pic to those contacts and your peeps are front-and-center.